I am fortunate to be in a position to work closely with and watch some of the most innovative technology companies in the world living in Silicon Valley, the mecca of all things high-tech. For over 20 years I've worked in technical, sales, marketing and executive roles within the enterprise software industry. My main focus has been software - operating systems, IT management and cloud apps. These days as the president of ManageEngine and Zoho.com, divisions of Zoho Corp, enterprise software genuinely excites and intrigues me because when implemented effectively, it can change the fortunes of a business. We offer business apps to help our customers succeed and enable IT organizations to deploy and manage the latest technologies to make their companies more competitive. In my downtime you can find me having the time of my life with my wife, four boys...and always with my iPhone somewhere nearby.

Open Source Software: The Hidden Cost of Free

Recently, Michael Skok wrote that “open source is eating the software world.” As general partner at North Bridge Venture Partners, Skok should know. He’s witnessed the power of open source as an entrepreneur and VC. And he’s seen the positive, long-term adoption trends revealed by the annual “Future of Open Source” survey sponsored by his firm and others.

While not entirely hyperbole, Skok’s claim raises a fundamental question: Should you let open source eat your software world? Maybe.

If you’re an ISV or if software development is central to your company, some degree of open source adoption is almost a foregone conclusion. But if software development is not a core competency for your company, then using commercial software may still make sense.

In the spirit of full disclosure, my company develops commercial software. We are also one of the vendors who’d get displaced if IT departments decided to replace packaged IT management software with freely-available, open source alternatives. So I’ve got a dog in this fight, so to speak. I’m just not convinced that this particular fight is “winner takes all.” Here’s why.

Build or Buy – You Pay Either Way

As suggested above, not everyone has the desire or the skills to support, maintain and even enhance a software solution. And that’s what you’re doing with open source: You’re responsible for maintaining, enhancing and customizing the application to meet your needs.

Think of commercial software as a house and open source software as everything you need to build a house — raw lumber, nails, sheet rock, windows, plumbing fixtures and the rest. You can spend your money and buy the house, or you can spend your time and build the house. Either way, you pay for your house.

Like a do-it-yourself house, you are on your own if something goes wrong with your homegrown, open source application. Yes, you’ll find plenty of free help online. Too much help, perhaps, and that may lead to one or more wild goose chases as you hunt down and fix the problem yourself (think many, many trips to the Home Depot). But that’s a key dividing line between buying commercial software and building your open source solution.

Free, open source software may be a cost-effective alternative on the front end of an application development project, but you’ve got to factor in the costs of the ongoing maintenance and support as well as the up-front development to get the project’s true cost — not to mention business risk.

Swapping Application Lock-in for Vendor Lock-in

One of the chief advantages of open source software is that it frees you from vendor lock-in, which makes it extremely difficult and expensive to switch off a vendors’ proprietary commercial app. In fact, “freedom from vendor lock-in” ranked as the number one reason to adopt open source software in the 2011 and 2012 Future of Open Source surveys. In the 2013 survey, “freedom from vendor lock-in” was number two, edged out by “better quality software” in the number one slot.

Am I going to argue in favor of lock-in? No, but you’re still locked in with open source software, just not to the vendor. With open source, you’re locked in to your app. After you’ve opted for an open source app, it’s up to you to provide ongoing maintenance, upgrades and troubleshooting, as well as any needed end-user support. Congratulations! You’re now a software vendor. The high switching costs of commercial apps are now replaced by the high costs of supporting open source apps.

Bottom line, open source may be “eating the software world,” but not all of it. For ISVs and other software development professionals, open source is a no-brainer. We use it in development and in our commercial products wherever and whenever it makes sense. It is free, after all, and the quality is second to none, as this year’s Future of Open Source survey reinforces.

But software pros have resources in place to support their open source efforts. Your organization may not be so lucky, or it may not be interested in putting them in place. After all, not every company has acquired an appetite for open source.

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I think you have missed the complete point of open source software. 1. open source doesn’t mean free. There are plenty of companies that have a product and charge for it. 2. With vendor commercial closed source applications one gets vendor lock in and application lock in 3. Support lock in makes things worst when they won’t get back to you and you wait weeks on a critical issue. I realize that not all vendors are like this but if it is closed source then I don’t have another choice once I get the app. 4. There is a TON of support for open source both commercial and free. Instead of just one vendor or the vendor’s approved distributors. 5. IT has to support the application either way. open source, commercial or closed source. It isn’t the same as software developing but thats why support works for open source (see point 4). 6. My company pays for software. both open source and commercial. We have some free open source and free commercial software as well.

True, open source doesn’t necessarily mean free. But, in the article, I am referring to the “free” option that doesn’t come from a commercial provider. If you are paying for an open source app, you are essentially buying commercial software (just paying for services or something else other than the software). Of course, you have the rights to the source code in theory (if the vendor doesn’t perform), but then you are back in the situation I talk about in the article – having to maintain it yourself or find somebody else to do it!

As I said, we leverage open source whenever possible, but we also recognize that it is not “free.”

What you say has some truth to it, but the support provided in the open source world far outweighs the support that a commercial company can provide. It’s just a matter of numbers. Proprietary software companies are very limited in the number of support staff they can provide. Open source software sometimes has thousands of people willing and ready to give support. That’s what the community is about.

At the company that I work for, we live and breathe open source software. We found out that proprietary software companies could not begin to provide support engineers more knowledgeable than our own staff. We spent too much time on the phone or waiting for answers that we already knew were not going to solve our problem. We switched to open source and it was like walking into a new world.

A good example is Nginx, the open source web server software. There are so many people monitoring their support email list that we get answers that we can really use and we get them fast. The solutions that we have been able to create for our clients are far more elegant than anything else that we have found in the proprietary software world.

Chrome is Open Source. It’s more HTML5 compliant than IE. Linux is Open Source and it boots faster and burns less energy than Windows. Gimp is Open Source and it is more powerful than Photoshop. Eclipse is Open Source and it supports more languages than Visual Studio. LibreOffice is Open Source and it doesn’t cost anything and can do everything which Microsoft Office can do. Redhat has customer support agents that will be happy to help you if you need it. Android is Open Source and if you call software a house the Android is a house. Android is not a raw piece of lumber that you need nails for.

As far as raw nuts and bolts go, on Windows you just have C#, VB and Visual C++ but on Linux which is Open Source you have C, C++, Perl, Python, Ruby, Haskell, Go, PHP, Ada, Algol, Awk, Unix Shell, TeX, TCL, PL/1, Rexx, Modula, Java, Javascript, Fortran, Csh, Cobol, bash and the list goes on and on.

In Open Source one has choices. With Windows you don’t and have to adjust the way you do things on a day to day basis because Windows is restricted in options offered to it as Microsoft only has a limited mount of developers and they are busy fixing all the bugs and security flaws inherent in Windows and working to fix Windows 8 as to make it usable.

Bottom line. With Open Source there are clearly more choices, price points and products to meet your companies needs. With Windows you have to take whatever junk Microsoft shoves at you.

Yes, I agree, and I have had my share of horrendous problems with Microsoft products. Many years ago I used MS Project to create a huge project plan. I exported it to HTML format and checked it with my browser of the time, which happened to be Netscape. Netscape rendered it perfectly, indenting sub-tasks under main tasks so that reading the project plan was intelligible as a bunch of tasks that were fulfilled by sub-tasks.

I posted the whole thing on the companies internal web server and smugly went to bed thinking of how I was doing something cutting edge for the time. It all looked great.

The next day I went early to my eight o’clock meeting where I was to present to a group of about thirty engineers and their bosses. Everybody was mad and it was becasue they all had to use Internet Explorer from their work computers. It turned out that even though MS Project exported an HTML version of the project plan that worked with Netscape, IT DID NOT WORK WITH Internet Explorer!!!!

I put in an angry call to Microsoft and they explained that there was really nothing that they could do anytime soon. It would take months for the required change to work it’s way into Internet Explorer.

I had to manually go through the HTML code to make it work with IE and it took me three days. Three days that the client was unwilling to be billed for. I began to hate Microsoft and all proprietary software and vowed to be free of it completely someday.

“As suggested above, not everyone has the desire or the skills to support, maintain and even enhance a software solution. And that’s what you’re doing with open source: You’re responsible for maintaining, enhancing and customizing the application to meet your needs.”

Commercial software still requires customization, tweaking, and maintaining to get it to work exactly as you want it to work as well. it’s not like you buy something and it works exactly how you want right out of the box – no software ever works like that…. ever !

ultimately i agree with the others – i think you misunderstand what open source software is.

As I said in my reply to Timothy, I am talking about open source that is not being procured through a commercial vendor. If you are getting open source software from a Red Hat, as an example, you are essentially buying commercial software.

Most important aspect of Open Source is that it is open. With proprietary software one never knows what it is doing. With Open Source you can read the code yourself and know what is in it. With Windows there could be all sorts of spyware in it and you will never be able to know that. There can be all sorts of spyware in Windows. Windows can turn on the camera and you could be being watched. At night while you sleep someone at Microsoft can turn on your Xbox and see in the dark with the sonar which is in it. Microsoft could even program in a back door and give the keys to government agencies like the NSA, FBI, CIA or even Playboy who could use your Xbox to film you having sex and post it on the internet.

There are zillions of hidden costs in not knowing what you are bringing into your home. Open Source combats that by allowing you to inspect the code like Linux and Android does. Microsoft hide what is in Windows. Linux doesn’t hide. It has nothing to hide and they prove it. We know Microsoft hides things in Windows and keeping Windows hidden proves that Microsoft has something to hide and that is worrisome.

Open Source is not about cost of owner ship for the end user but about clever ways of collaborating globally on the 99% non-differentiating features in a typical software system for developers. It’s gotten to the point where the remaining 1% is typically not worth a lot in terms of licensing and certainly not worth the trouble of developing that 99% non differentiating stuff in house when you can simply take some open source and use it. There are some darwinian forces at work here where non OSS centric development models are simply no longer cost effective.

You are not going to differentiate yourself in a positive way doing that 99%, even if you do a good job. Worse, you differentiate yourself negatively if you do a shoddy job. That 1% had better be worth it if you go down that path. That means using open source is not a matter of choice anymore. Most developers can simply not afford not to use it.

Adobe, Apple, and Microsoft are the last of a dying breed of vendors that spend massive amounts of R&D on a feature set that to no small amount overlaps with free open source products. That’s a lot of R&D money that goes into features you can get for free elsewhere. All that is justified by the added value in that 1% of the software. That 1% is generously rounded up BTW. The bits and pieces in commercial software that genuinely add value are proportionally very small to the other bits. Of course that value is subjective in the end. However, the R&D cost correlates to overall size of the software and not just the value adding bits: developers pay for the whole thing. And yes, I believe that in the case of both MS and Apple they are approaching the point where that is going to be bad business for them.

If you think about it, the linux kernel is evolving at a cosy rate of about a quarter million lines of code modified/added every few months or so (check the statistics on Github). That’s the output of pretty much the entire mobile devices industry, chip manufacturers, and others with a stake in Linux collaborating. Hundreds of companies, thousands of individuals. That’s an absolutely massive amount of change and it’s been sustained for decades. There is no way that either Microsoft or Apple are keeping pace with that with their in house kernels. That means that in terms of kernel development they are falling behind rapidly. The OS kernels of OSX or Windows are no longer differentiating assets and have not been for a very long time. And that’s just the kernel.

Consequently, most business models in the software world are shifting away from software licensing as a main revenue driver because increasingly large parts of the underlying software are necessarily going to be open source anyway. Increasingly the added value is in distribution,integration, testing, packaging, support, etc. That’s a multi billion dollar business that unlike the software licensing business is growing.

Not sure you really appreciate the value-add of Open Source from the end-user side. You basically make the case that using an Open Source solution means one is “vendor locked” to the Open Source solution. But the key differentiating point isn’t that the software is free, it’s that the data model is open. And so if someone wants to move to a different solution, there’s a good chance they can get their data out of the system. In the Open Source world there’s an especially good chance someone has written a tool to already dump the data into XML or something.

Also with Open Source, people can do speculative implementations. It’s hard to anticipate every possible need or want from a software system, so standing up an Open Source solution for free can be very educational from a requirements gathering standpoint. I’ve done this several times and the Open Source solutions I’ve been considering have been “good enough” or “not good enough” but either way it only cost me my time – I didn’t have to spend money on licenses up front to figure out that what I’d spent money on was the wrong tool after all.

Yup, you are highlighting some of the benefits of open source software. And, it sounds like you have the ability to maximize the use of open source software. But, I will also say that many don’t have the same capabilities and get pulled into the open source panacea.

You got that right. I think that it is simple prejudice. Too many people don’t understand the concept of mass collaboration and assume that if the software can be obtained for free it must be inferior to paid software.

Please read Dilbert for many illustrations. Too many managers are not too bright. Way, way too many….

Free and Open Source Software is not about the price, as you probably very well know. It’s about many other things, most importantly Accessibility. It’s easy to try out, easy to integrate, and easy to install on any number of machines without license hassle. As a side-effect of being free, you can use it without having to go through the trouble of making a payment. It has other benefits too, of course, but this is the main reason it’s “eating the software world”, IMHO.